Law 531 - Contracts and Intellectual Property Drafting Exercise

Contracts and Intellectual Property Drafting Exercise

LAW/531

April 12, 2016

Contracts are one of the most important tools we use in business. Contracts define the nature of the agreement, and the terms by which both parties agree to follow for the duration of the business agreement is binding. When either of the parties defaults on the agreement they must somehow come to a resolution on how to correct the deficiencies. Even though contractual clauses bind parties to the terms of a contract, they are an important factor in contracts.  Contractual provisions define the terms of the contracts and as much as they bind parties to the terms of a contract, they also provide parties a way out of the contract.

        In the conduct of business, contracts are what tie parties together in agreement. The parties agree to the conduct of the business and how it should be conducted.  Each party agrees to the guidance outlined in the in a contract. While these contracts bind the parties to the terms of the agreement, there may also be clauses contained in the contract which allows either party to exit the contract. There may also be other clauses in the contract which covers how any disputes may be settled.  Some clauses indicate that such disputes may be resolved by arbitration or other alternative forms of dispute resolution, such Alternative Dispute Resolution  (ADR) clauses. An important thing to remember is that, ADR clauses may not cover labor disputes.  As Murphy states “it is not intended that this shall be an act referring to labor disputes, at all. It is purely an act to give the merchants the right or the privilege of sitting down and agreeing with each other as to what their damages are if they want to do it. Now, that is all there is in this.” (Murphy, 2002)

        The fact that a clause is written in the contract regarding how disputes that arise between the property owner and tenant concerning any provision of the contract or the performance of any terms contained in the agreement would be settled shows that there is potential for disputes and the means of handling them must be identified well before they arise. In their article, the Shadow of Contracts, the authors stated that “while it is important to understand whether and when contracts will be likely to be effective in preventing conflicts, it is also important to understand how the reliance on contracts will affect the dispute resolution process and its outcome.” (Pg. 535. Lumineau & Malhotra, 2011). Simply put, the contracts are design to prevent parties from having issues, but once issues are encountered then, the contracts should also determine how the dispute resolution process will proceed and in some cases determine its outcome. It is essential then that every clause that outlines how disputes will be resolved to be as detailed as possible.